By Rick Glaze

Hurricane Katrina brought massive human and material damage to Mississippi, Louisiana and other southern states. While this damage and destruction was limited geographically, the economic waves will reverberate throughout the world.

Damaged crops and curtailed energy production will affect prices for some time. Rebuilding will be massive. Jobs, materials and other supplies will be in high demand, leading to increased economic activity over time.

Is the real estate boom falling off a cliff? Recently, newspaper front pages posted headlines screaming, “The bubble bursts” and the next day “Surprising strength” and “A housing market that defies predictions.” Which is it?

The reality is that the mainstream media is defying credibility.

What happened? Existing home sales dipped 2.6 percent but still recorded the third-highest rate in history. This negligible dip provided fuel for the media wolves to howl at the moon. Next, the Census Bureau reported a 6.5 percent jump in new home sales. More howling but with a 180-degree turn was the response. Many analysts think that as long as mortgage rates stay low, now under 6 percent, the housing market will not collapse.

More jobs helped push consumer confidence higher this month but the skyrocketing price of energy may dampen that confidence. Factory orders are reported weak and energy may be to blame. Consumer spending is two-thirds of the economy, and if spending slows, it will ripple into the entire system.

On the local front, the venerable icon and bookseller Kepler’s shut its doors in Menlo Park last week. Reportedly, a sign on the locked front door said Kepler’s was a victim of the economic downturn.

There must be a book somewhere in all those shelves that mentions the economy is growing at a healthy 4 percent, hardly a downturn.

Rick Glaze is the president of Glaze Capital Management Inc. of Los Altos and is a registered representative offering securities through First Allied Securities Inc.